Iran Opening Up, The New Land Of Opportunity
Opinions surrounding the recent deal struck between the 6 UN power nations and Iran abound, everyone seem to have one or two.
Some have labeled as a horror, including Donald Trump.
That sentiment that seems to be shared by the rest of the Republican presidential field too.
On the other side of the aisle US President Barack Hussein Obama and his supporters heralded the accord as historic and a resolution to “the most consequential foreign policy debate that the US has had since the invasion of Iraq.”
The consequences of the nuclear accord are polarizing depending where one stands politically. But one thing is very clear, the sudden inclusion of a country with a population of 80-M, 80% of whom are under the age of 32, and a $400-B economy (the 2nd largest in the Middle East behind Saudi Arabia) into the international financial marketplace holds dramatic implications for investors and corporations across the world.
What actually happened after 13 years of negotiations: On 14 July 2015, an agreement was reached between Iran and the United States, Russia, China, United Kingdom, France and Germany. This agreement as enacted will lift economic sanctions on Iran’s energy, trade and financial sectors, and could come into effect in as little as 6 months time. The lifting of sanctions comes with a lots requirements that must be fulfilled on Iran’s side, including allowing, “the most comprehensive inspection and verification regime ever negotiated to monitor a nuclear program.”
The list of requirements and caveats are numerous, but (the political rhetoric aside) the Big Q is this: How investors should look to capitalize on what is being called a once in a lifetime investment opportunity?
The Key thought that comes to my mind in any discussion of investment in Iran or the Middle East as a region is the Oil & Gas industry. It is true that Iran holds the world’s 4th largest Crude Oil reserves and the largest supply of Nat Gas, Iran is very much more than just another Oil-rich Middle Eastern nation.
For instance: Iran’s manufacturing and automotive sectors are primed to be early benefactors of the lifting of economic sanctions. According to Iran’s inudstry minister, Mohammad Reza Nematzadeh, Iran’s manufacturing industry grew by 6.7% last year, and Iran hopes to 3X their car manufacturing output to 3-M cars per year by Y 2025.
Also, with its strong middle class and a demographically favorable population, Iran’s telecommunications and banking sectors are also primed to perform well moving forward.
So tune out the noise and stay tuned as this opening up of Iran happens.
HeffX-LTN
Paul Ebeling
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